Trade-Ideas LLC identified

NxStage Medical

(

NXTM

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified NxStage Medical as such a stock due to the following factors:

  • NXTM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.1 million.
  • NXTM has traded 73,427 shares today.
  • NXTM is down 3.7% today.
  • NXTM was up 7.7% yesterday.

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More details on NXTM:

NxStage Medical, Inc., a medical device company, develops, manufactures, and markets products for the treatment of kidney failure, fluid overload, and related blood treatments and procedures. Currently there are 4 analysts that rate NxStage Medical a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for NxStage Medical has been 505,500 shares per day over the past 30 days. NxStage Medical has a market cap of $1.1 billion and is part of the health care sector and health services industry. The stock has a beta of -0.35 and a short float of 6.5% with 4.94 days to cover. Shares are up 6.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates NxStage Medical as a

hold

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 74.8% when compared to the same quarter one year prior, rising from -$6.71 million to -$1.69 million.
  • NXTM's revenue growth trails the industry average of 38.0%. Since the same quarter one year prior, revenues rose by 14.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 49.10% is the gross profit margin for NXSTAGE MEDICAL INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -1.94% is in-line with the industry average.
  • NXSTAGE MEDICAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NXSTAGE MEDICAL INC reported poor results of -$0.40 versus -$0.30 in the prior year. This year, the market expects an improvement in earnings (-$0.31 versus -$0.40).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, NXSTAGE MEDICAL INC's return on equity significantly trails that of both the industry average and the S&P 500.

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